Netflix Marketing Strategy: $12.6B Quarter, Ads Rising

Netflix's marketing strategy in 2026 centers on membership growth, pricing and advertising. It reported second-quarter revenue of $12.56 billion, up 13%, in its July 16, 2026 shareholder letter, after 2025 ad revenue of more than $1.5 billion, up more than 2.5 times. Netflix also said it will give fewer engagement updates, and its stock fell more than 7% on a soft outlook. Third-quarter results arrive October 20, 2026.

Paid memberships are Netflix's count of paying subscriber accounts. The ad tier is Netflix's lower-priced plan that shows advertising. What We Watched is Netflix's periodic engagement report on viewing hours for its titles. Operating margin is operating income as a share of revenue.

What did Netflix report for the second quarter of 2026?

Netflix reported second-quarter 2026 revenue of $12.56 billion, up 13% year over year, driven by membership growth, pricing and higher ad revenue, per its July 16, 2026 SEC shareholder letter.

Revenue came in at $12.56 billion against a $12.59 billion estimate from analysts polled by LSEG, per CNBC on July 16, 2026, so the stock fell on the outlook more than on the quarter itself.

How fast is Netflix's revenue growing quarter by quarter?

Netflix's revenue grew from $11.08 billion in the second quarter of 2025 to $12.56 billion in the second quarter of 2026, per the quarterly series in its July 16, 2026 shareholder letter. The company forecast $12.86 billion for the third quarter of 2026.

Two ratios follow from the series, and both are EPR calculations. Revenue grew about 2.5% from the first to the second quarter of 2026, and the forecast implies about 2.4% from the second to the third. Growth is steady, which is why a slightly weaker forecast than analysts wanted moved the stock.

How is advertising changing Netflix's strategy?

Advertising is becoming Netflix's second revenue engine. Ad revenue rose more than 2.5 times in 2025 to over $1.5 billion, and Netflix named growing its ads business a 2026 focus, per its January 20, 2026 shareholder letter.

Mirror Review reported on July 17, 2026 that management repeated a projection of about $3 billion in ad revenue by the end of 2026, per its Q2 coverage. Other outlets reported the same expectation of ad revenue around $3 billion for 2026, a near-doubling from 2025.

The size of the opportunity is visible in two EPR calculations. Ad revenue of $1.5 billion was about 3.3% of 2025 revenue. A $3 billion target would be about 5.9% of the $51.2 billion midpoint of Netflix's 2026 forecast.

The shift changes the message to the market. Netflix now sells reach to advertisers as well as plans to households, a model EPR covers in its connected TV consolidation analysis.

Why it works: An ad tier lets Netflix earn from a subscriber twice, through the plan price and through advertisers who pay to reach that subscriber. Netflix's January 20, 2026 letter shows the result: ad revenue more than doubled in 2025 while total revenue grew 16%.

Why did Netflix cut back on engagement reports?

Netflix said on its Q2 call that it would reduce how often it publishes its What We Watched engagement reports, per CNBC on July 16, 2026. Co-CEO Ted Sarandos said on the call that engagement had improved this year and there were no changes in release strategy, per the same report.

Netflix's shareholder letter said the goal of separating the report from earnings is to keep the focus on revenue and operating profit, with the report moving to an annual first-quarter release beginning in 2027. The change matters for communications because engagement data had given reporters and analysts a regular, quotable number.

The January 2026 letter had reported that view hours rose 2% in the second half of 2025, driven by a 9% rise in viewing of branded originals. That is the kind of figure the reduced reports will supply less often. EPR's read: fewer disclosures lower the risk of a bad headline, and they also reduce the supply of Netflix-sourced numbers that reporters can cite.

What risks does Netflix's strategy carry?

Netflix's strategy carries three risks: guidance that falls short of expectations, less engagement data for outsiders, and dependence on ads to fill the growth gap.

Netflix's Q3 revenue forecast of $12.86 billion fell short of Wall Street's roughly $13 billion estimate, per Mirror Review, and the stock dropped. The move to fewer What We Watched updates removes a regular proof point. Ad growth has to rise while membership and price gains slow.

Netflix also gave a full-year 2026 operating margin target of 31.5%, per a June 2026 earnings preview from Hudson Labs, which leaves little room for a miss. EPR's coverage of investment PR at Meta, Netflix and Shopify looks at how companies handle this tension.

What can streaming and brand teams copy from Netflix?

Streaming and brand teams can copy three moves from Netflix: give a numeric forecast each quarter, add a second revenue line, and explain disclosure changes before critics do. The table lists the evidence and a check to run first.

Why it works: A quarterly forecast gives analysts a number to test, and Netflix's own letter then reports whether it hit it. Netflix said Q2 revenue and margin were in line with its guidance, which turns a routine quarter into a record of reliability.

Set the date for your own numbers in advance, as Netflix has: it will post Q3 results on October 20, 2026, followed by a video interview with co-CEOs Greg Peters and Ted Sarandos, per Stock Titan. For another streaming strategy, see EPR's Spotify marketing strategy, and for a media rival see Disney's marketing strategy.

Related EPR coverage

• CTV consolidation: Roku, Amazon, Netflix and Disney, the ad-supported streaming race.
• The credibility gap: Meta, Netflix and Shopify, investment PR lessons.
• Twenty influential CMOs, including Netflix, marketing leaders.
• Spotify marketing strategy, a streaming peer.
• Disney marketing strategy, a media rival.